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SEC Chair Gensler discusses climate disclosure rule at Chamber of Commerce event

On Behalf of | Oct 31, 2023 | Securities and Compliance

The chair of the Securities and Exchange Commission addressed the SEC’s proposed climate disclosure rules during a recent U.S. Chamber of Commerce forum, according to a Reuters report.

At the Oct. 26 event, Gary Gensler spoke with business leaders about the new regulations that would expand the requirements for public companies to disclose climate-related information.

This information would be required of firms when they register as public companies with the SEC, as well as in their annual filings. The disclosures would include details about climate-related risks that are reasonably likely to have a material impact on their business, results of operations, or financial outlook. The rules would require companies to explain how they intend to manage those risks.

Under the SEC’s proposal, registrants would also have to disclose information about their direct greenhouse gas emissions and indirect emissions from purchased electricity or other forms of energy, known as Scope 1 and Scope 2 emissions, as well as disclosing supplier and partner emissions, known as Scope 3 emissions.

Gensler told the Chamber that American firms would benefit from the rule by not being required to work within the regulations imposed in other countries where they do business. He noted that new climate disclosure rules in Europe will take effect in January, but American companies would be allowed to tell European regulators that they are in compliance with the new U.S. rules.  He added that the SEC is attempting to bring some consistency and comparability to climate disclosures among all companies.

Gensler told the Chamber of Commerce that the rules have received about 16,000 public comments and legal challenges are widely expected.  Gensler did not provide an update on when the regulations would be finalized.

In a statement following the event, Tom Quaadman, U.S. Chamber of Commerce Vice President, Center for Capital Markets Competitiveness, expressed the Chamber’s concerns over the proposal, saying it “will impose costs equal to all disclosures companies already make, and, worse, that it significantly underestimates the actual compliance costs for companies.”

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